House sales drop as rental demand soars

House prices in England and Wales slipped below the £160,000 mark, the Land Registry has reported. Confusingly, this morning Nationwide reported that house prices have risen over the last month by 0.4% since October and by 1.6% over the last year, to stand at £165,798.

The average house price now stands at £159,999, a 0.9% monthly fall and the largest monthly drop since February 2009.

The October figure was also down 3.2% compared with October 2010.

Even in London, house prices dropped, by 1.6% in October compared with September, to stand at £340,408. London house prices are now just 0.3% higher than a year ago.

Volumes of house sales have also decreased sharply.

In May to August 2010, there was an average of 60,970 sales per month.

In the same period this year – the last period for which transaction data is available – there were 57,177 sales on average per month, a drop of 6.2%.

By contrast, the new homes website Smartnewhomes yesterday reported that asking prices of new homes have bounced up to reach £222,620.

That is 0.6% higher than in September, and an astonishing 5% higher than in October last year. Commenting on the figures, Robert Gardner, Nationwide's chief economist, said: “UK house prices increased by 0.4% in November, taking the annual rate of growth to 1.6%, up from 0.8% the previous month. The price of a typical home is now £165,798.

“House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook. But, with the UK economic recovery expected to remain sluggish well into 2012, house price growth is likely to remain soft, with prices moving sideways or drifting modestly lower over the next 12 months.”